ECJ rules on Dutch gambling laws - Industry calls on the European Commission to propose legislation at EU level

Today, the European Court of Justice (ECJ) rendered two preliminary rulings addressing key questions relating to the compliance of the Dutch legislation with the EU Treaty. The cases (C-203/08 and C-258/08) at stake originate in national proceedings involving Ladbrokes and Betfair, two companies, established in the UK.

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Sigrid Ligné, Secretary General of the EGBA, said: "The Court has confirmed that if a Member States wants to prohibit or channel gambling through a single operator it has to comply with strict features that we consider are clearly not met in the context of the Dutch legislation. But it is now for the national judge to assess the consistency of the Dutch gambling policy and to make a final decision".

She adds: "Internet raises new questions and challenges that cannot be resolved through the judicial process. It is for the European legislator to ensure that this IT-based medium which allows for the highest security standards warrants consistent customer protection and fraud control throughout the EU."

As confirmed by the Internal Market Commissioner Barnier, there is momentum to take action at EU level in the context of a Green Paper and - whenever necessary - through infringement procedures (3) against Member States that do not comply with EU law.

Sigrid Ligné concludes: "We are confident that reform of the gambling laws will take place in the Netherlands, as they already do throughout the EU. Beyond the legal considerations, you also have to look at the reality of the market. There is a consumer demand for online gaming in the Netherlands, like there is all over Europe. Increasingly, EU Member States like Italy, Denmark and France realize that online gaming is a popular leisure activity and are opening their market to competition. EGBA urges the Dutch authorities to also start regulating the market."

In line with previous case law, the ECJ confirms that under certain strict circumstances a monopoly can be allowed to promote its offer for the purpose of fraud prevention. However, according to the ECJ:

* If the Netherlands is "pursuing a policy of substantially expanding betting and gaming, by excessively inciting and encouraging consumers to participate in such activities (…) it would have to be concluded that such a policy does not limit betting and gaming activities in a consistent and systematic manner and is not, therefore, suitable for achieving the objective of curbing consumer addiction to such activities" (Ladbrokes, case C-258/08, 28)

* "Since the objective of protecting consumers from gambling addiction is, in principle, difficult to reconcile with a policy of expanding games of chance characterised, inter alia, by the creation of new games and by the advertising of such games, such a policy cannot be regarded as being consistent unless the scale of unlawful activity is significant and the measures adopted are aimed at channeling consumers' propensity to gamble into activities that are lawful" (Idem, point 30)

* In the context of that assessment, it is, specifically, for the national court to determine whether unlawful gaming activities may constitute a problem in the Netherlands and whether the expansion of authorised and regulated activities would be liable to solve such a problem (Idem, point 31).

When it comes to the national licensing schemes, the ECJ also confirms that:

* "Article 49 EC must be interpreted as meaning that the principles of equal treatment and the consequent obligation of transparency are applicable (…) in the field of games of chance" (Betfair case C-203/08, point 62)

* "If a prior administrative authorisation scheme is to be justified even though it derogates from a fundamental freedom, it must be based on objective, non-discriminatory criteria known in advance, in such a way as to circumscribe the exercise of the authorities' discretion so that it is not used arbitrarily" (Betfair case C-203/08, point 50)

EGBA promotes fair competition for licensed EU operators and the possibility for consumers throughout Europe to access regulated, secured and safe gaming and betting services. We are committed to and apply an exemplary level of corporate and social responsibility. EGBA strives for a regulatory regime that is proportionate, non-discriminatory, fully adapted to the Internet and the cross border nature of our sector.